Obesity remains a serious health problem and it is no secret that many people want to lose weight. Behavioral economists typically argue that “nudges” help individuals with various decisionmaking flaws to live longer, healthier, and better lives. In an article in the new issue of Regulation, Michael L. Marlow discusses how nudging by government differs from nudging by markets, and explains why market nudging is the more promising avenue for helping citizens to lose weight.

Two long wars, chronic deficits, the financial crisis, the costly drug war, the growth of executive power under Presidents Bush and Obama, and the revelations about NSA abuses, have given rise to a growing libertarian movement in our country – with a greater focus on individual liberty and less government power. David Boaz’s newly released The Libertarian Mind is a comprehensive guide to the history, philosophy, and growth of the libertarian movement, with incisive analyses of today’s most pressing issues and policies.

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Americans Are Not Convinced of Top Down Economics

Several recent polls have shown Americans are becoming increasingly skeptical of Washington’s economic planning capabilities. According to a recent Washington Post poll, 73 percent of Americans doubt Washington’s ability to solve economic problems. In fact, these numbers have leapt from 52 percent last year and from 41 percent in 2002. It appears that the more the government has tried to fix the U.S. economy, the less confident Americans are that the government is capable of doing such things.

When the government in Washington decides to solve economic problems, how much confidence do you have that the problem actually will be solved: A lot, some, just a little, or none at all?

Another example of this skepticism toward government economic planning comes from a recent Rasmussen poll finding that 71 percent of Americans believe the private sector is better than the government at determining technological potential.

Who is better at determining the long-term benefits and potential of new technologies, private sector companies and investors or government officials?

71 percent: Private sector companies and investors

11 percent: Government officials

17 percent: Not sure

This suggests the public is not convinced that President Obama’s “investment” spending will necessarily be properly directed to its most useful ends. For example, in the president’s 2011 State of the Union address, he marshals the word “invest” or “investment” 13 times, with 8 specifically referencing government investment. It is important to remember that when government “invests” in the economy, it requires officials to make decisions about who gets funding. This presupposes that the government has the knowledge to know which technologies have the greatest potential and thus are worthy of investment. Instead of letting billions of individuals work through a marketplace to best allocate resources to the technologies with the greatest potential, this would instead rely on a small, centralized group of intellectuals deciding who gets what.

Also, according to this Rasmussen poll the public is not convinced that when the government does “pick winners” to receive government funding, that the money will not be wasted. 64 percent believe it is likely that if a private company, which cannot find investors, gets funding from the government that the money will be wasted.

Sometimes a company cannot find investors for a new technology and they seek research funding from government. Suppose a private company cannot find investors but gets funding from the government. How likely is it that government funding will be wasted?

30 percent: Very likely

34 percent: Somewhat likely

21 percent: Not very likely

4 percent: Not at all likely

11 percent: Not sure

It might be time to rethink the alluring sound of government “investment” and reevaluate the merits that government has the knowledge necessary to make these sorts of economic decisions.